The Federal Government released its second round of economic stimulus measures on 22 March 2020 in
support of Households, Pensioners, SME's, Casuals and Sole Traders.
The measures amount to a further $66 billion in Federal Government support. For SME's there is a strong
focus on providing assistance for maintaining and retaining employees over the next six months and
stimulating business investment.
Here's a summary:
Relief Measure |
Dates |
INDIVIDUAL MEASURES
|
Coronavirus Supplement
$550 per fortnight payment.
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Eligibility:
Payable to individuals in receipt of, or who become eligible
for:
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• Job Seeker Payments
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• Youth Allowance Job Seeker Payments
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• Parenting Payments
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• Farm Household Allowance
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• Special Benefits
|
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Payable over the next six months.
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This is in addition to the eligible income
support already paid.
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Additional Stimulus Payment
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$750 stimulus payment to eligible individuals.
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This is in addition to an earlier $750 payment amount that
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was included in the first Stimulus Package announced on 12
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March 2020.
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Eligibility:
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• Pensioners
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• Social security recipients
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• Veterans
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• Concession card holders
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• Other income support recipients
|
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Mid-April 2020 - first payment
Mid-July 2020 - second payment
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Note: The July 2020 second payment is not
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available to recipients of the Coronavirus
Supplement.
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INDIVIDUAL MEASURES CONT...
Superannuation withdrawals
Impacted individuals will be allowed to withdraw up to
$20,000 from their superannuation funds.
Eligibility:
- Unemployed people
- Those currently eligible for Job Seeker payments,
Parenting Payments, a special benefit or Farm
Household Allowance
Eligibility on or after 1 January 2020:
- An employed individual is made redundant
- Your working hours reduced by 20% or more
- You are a sole trader whose business has been
suspended or there has been a reduction in turnover
of at least 20%.
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Between April and 30 June 2020, eligible
people can access up to $10,000.
During the income year ending 30 June
2021, eligible people can access up to the
remaining $10,000.
On or after 1 January 2020.
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BUSINESS MEASURES - SME's, etc.
Employment Support
Provides tax free payments to eligible businesses that
employ people. The benefit is capped at $100,000 with a
minimum payment of $20,000.
This measure is also available to Not-For-Profit
organisations.
Eligibility:
- Businesses and Not-For-Profits with aggregated annual
turnovers under $50M
- Businesses and Not-For-Profits who need to employ
workers
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The payments will be equal to the lesser of
100% of the PAYG withheld on the
employee's salary and wages or $50,000 for
both the year ended 30 June 2020 and the
next financial year from 1 July 2022 to 30
September 2020.
The payments will be provided by the ATO as
a credit via the quarterly or monthly Activity
Statements as follows:
- Quarterly Lodgers - March 20 and
June 20 quarter BAS
- Monthly Lodgers - March 20, April
20, May 20, June 20 Activity
statements
The bulk of the 2020 financial year
entitlement is paid in the earlier March 20
quarter BAS.
NB: Eligible businesses that are not required
to withhold tax from employees' salary and
wages will receive a minimum payment of
$20,000. 50% or $10,000 is paid in the
March 20 quarter. The other 50% is paid as
$5000 in June 20 quarter and $5,000 in
September 20 quarter.
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BUSINESS MEASURES CONT...
Instant Asset write-off
Eligible businesses will be able to deduct in full the cost of
acquiring eligible assets costing less than $150,000 (on a
"per asset basis").
Eligibility:
- All businesses with aggregated turnover of less than
$500M until 30 June 2020
- Assets can be new or used
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Assets need to be installed ready for use or
first used before 30 June 2020.
Deduction claimed in the businesses 2020
Financial Year Income Tax Return.
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Business investment allowance
Eligible businesses will be allowed to claim a business
investment allowance comprising the normal depreciation
permitted on the asset item and a bonus 50% depreciation
deduction.
Eligibility:
- All businesses with aggregated turnover of less than
$500M
- New assets only
- No limit to the cost of acquiring the individual asset
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Only for assets acquired after 12 March
2020.
Assets need to be installed ready for use or
first used on or before 30 June 2021.
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Insolvency and directors' personal liability relief
A raft of measures designed to provide extended protection
to financially distressed businesses arising from the
economic impacts of the Coronavirus health crisis. These
include:
- A temporary increase in the threshold for a creditor to
initiate bankruptcy proceedings
- A temporary increase in the threshold (from $2K to
$20K) that creditors can issue a statutory demand
- A temporary increase in the time the debtor has to
respond to both statutory demands and to initiated
Bankruptcy proceedings
- Temporary relief for directors of companies from any
personal liability for trading whilst insolvent
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These measures extend the debtor response
periods to six months (previously 21 days).
They provide time extension and increased $
trigger points to protect and shield
impacted businesses and company directors
from any Insolvency and personal liability
actions.
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NEW SOUTH WALES STATE GOVERNMENT
On 17 March 2020, the NSW State Government announced the following Business Assistance measures.
|
Relief Measure |
Dates |
NEW SOUTH WALES BUSINESS MEASURES
Employment Support - NSW Payroll Tax
Payroll tax is waived for Apr20, May20 and Jun20.
Eligibility:
- Businesses with payrolls of up to $10M for the 3
months to 30 Jun 20
- Need to employ workers and/or eligible contractors
|
|
Apr 20, May 20 and Jun 20 Payroll Tax. |
Employment Support - NSW Payroll Tax
Payroll tax threshold is increased to $1M from 1 July 2020
(previously $900K).
Eligibility:
- Businesses with taxable payrolls of over $1M
|
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From 1 July 2020. |
Waiver of a range of fees and charges
Applies to small businesses including bars, cafes, restaurants
and tradies.
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ATO ASSISTANCE
The Australian Taxation Office (ATO) will provide support to taxpayers affected by COVID-19.
For individuals and businesses who may be having financial difficulties due to the current business conditions,
the ATO is providing assistance in the form of payment deferrals, tax variations, interest and penalty
remissions, etc as follows:
- Payment deferrals
If you have been impacted by COVID-19, the ATO have undertaken to work with taxpayers and their tax agent
to facilitate deferral of a range of tax payments, including tax instalments, FBT, GST, etc.
- PAYG (Pay-as-you-go) instalment variations
The ATO is loosening the rules regarding variations. Businesses that vary their PAYG instalment rate or amount
for the March 2020 quarter can also claim a refund for any instalments made for the earlier September 2019
and December 2019 quarters.
- Remitting interest and penalties charged
Where you or your business is affected by COVID-19, the ATO will consider remitting interest and penalties
incurred after 23 January 2020 that have been applied to tax liabilities that particularly, remain unpaid during
this disruptive period.
- GST payments
The ATO is easing the ability for businesses to change their reporting cycle (between quarterly and monthly) in
order to enhance their cashflow with respect to either receiving BAS refunds sooner or deferring BAS
payments to a later date.
- Superannuation guarantee payments
The ATO has advised that employers still need to meet their superannuation guarantee obligations, and that
the ATO cannot vary the contribution date or waive the superannuation guarantee charge where super
guarantee payments are late or unpaid.
BANKING SECTOR SUPPORT
The Australian Government, Reserve Bank of Australia and Australian Prudential Regulation Authority are
working with Australia's large banks to facilitate the flow of credit. The following are some of the key
measures as they primarily apply to SME's:
- SME Guarantee scheme
- Eligible lenders will provide unsecured working capital loans up to a maximum of $250,000
- The Australian Government will guarantee 50% of the loan issued by the eligible lenders
- The loans will be for periods up to 3 years with an initial six-month repayment holiday
- Application periods run from early April 2020 to 30 September 2020
- Proposed drawdown facility with interest only paid on the amount drawn down
- Simpler and faster application processes
- Loans subject to lenders' credit assessment process, with consideration made for business disruption
associated with COVID-19
2. Reducing the cost of credit
The Reserve Bank of Australia has introduced a number of measures into finance and credit markets designed
to put downward pressure on borrowing costs for both households and businesses. These measures have
facilitated the ability of major lenders to provide most (if not all) the following credit concessions:
- Interest rate reductions for both small businesses and households
- Additional interest rate reductions on SME business loans, most commencing during March 2020
- Relief from fees for Merchant Facility customers that are either facing financial hardship or seek to
temporarily suspend a facility until they recommence trading or wish to permanently close the facility
- Loan repayment deferrals
The introduced measures noted above have also assisted with the provision of loan repayment deferrals as
follows:
- Defer loan repayments (principal and interest) for up to 6 months for both SME's and home loan
customers
- Pause business credit card repayments for up to 6 months
Please note that your respective lender should be contacted with the specific concessions being provided
which may include other not noted above.